In times of extreme panic, what signals does the market give to smart investors?

Recently, I noticed a data point—the Fear & Greed Index has dropped to 11, hitting a new low in nearly a year. This number actually reflects a very interesting phenomenon: market sentiment has completely cooled off, and a large number of retail investors are starting to panic and flee.

But here’s the paradox. The more extreme the panic index, the closer a reversal is often predicted. Looking back at historical records reveals a pattern: every time the sentiment indicator hits bottom, it’s precisely when knowledgeable and patient players get on board. Those who can remain rational while others are screaming usually end up making profits.

How exactly to operate? My advice is as follows:

First, don’t follow the crowd to cut losses. During a decline, buy in batches and smooth out risk over time—that’s the correct approach for ordinary investors. No need to precisely catch the bottom; getting in at the mid-mountain is enough.

Second, be selective. Projects with solid fundamentals that fall out of a reasonable price range are worth paying attention to. During market downturns, it’s easier to see who has real strength.

Finally, never put all your assets in. Proper position sizing keeps your mindset stable. Leave enough “ammunition” to respond to subsequent changes, so you won’t be forced to cut losses at the worst moment.

Instead of watching K-line fluctuations second by second, it’s better to take advantage of market dormancy to learn more about projects and industry trends. True opportunities never appear during times of prosperity; they often come at the darkest moment before dawn.